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Wireless Drives $1.95 Billion in Verizon Q1 Profit
As Carrier Adds 677,000 Contract Wireless Subscribers
by Karl Bode 09:30AM Thursday Apr 18 2013
Verizon has released their first quarter earnings, which show the company generated $29.42 billion in revenues and $1.95 billion in profit for the quarter, just slightly below Wall Street analyst expectations. The company's earnings were as usual fueled by wireless, with Verizon adding 677,000 contract users on the quarter. Verizon says that their LTE network is now available to 287 million people in 491 markets across the United States.

Click for full size
Total revenue for wireless services was $19.5 billion, up 6.8% from this time last year, thanks in part to Verizon's use of shared data plans -- which lower voice and SMS costs for users but dramatically increase data pricing to the tune of $15 per gigabyte overages.

Speaking on the company's conference call with analysts and the media, Verizon CFO Fran Shammo this morning stated that they expect to have their first LTE-only handsets available to consumers early next year. The company has been using their EVDO (3G) network primarily for prepaid customers. Verizon also stated that they expect to have higher quality voice over LTE (VoLTE) handsets in consumer hands by early 2014.

As the chart above illustrates, Verizon continues to quite intentionally bleed DSL and copper phone customers, offset by the addition of 188,000 FiOS Internet and 169,000 FiOS TV customers on the quarter. At the end of Q1, Verizon claimed a total of 5.6 million FiOS Internet and 4.9 million FiOS TV subscribers, and 8.9 million total broadband lines overall. Verizon's waged a rather quiet war on DSL users in the hopes they'll flee to cable or wireless, resulting in just 3.3 million DSL users left to scare away or upgrade.

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FFH5
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join:2002-03-03
Tavistock NJ
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2 recommendations

Why Wireless division get all the attention

Consumer Wireless qrtly revenues $19.5 billion.
Consumer Wired qrtly revenues $3.6 billion.

Now where would you invest your capital dollars?
openbox9
Premium
join:2004-01-26
Germany
kudos:2

1 edit

3 recommendations

Re: Why Wireless division get all the attention

Agreed, but that's not what people around here want to hear.

Everyone should have FTTH with 1 Gbps for $49/mth. The carriers are dragging their feet and turning the US into a third world country

/sarcasm for those that didn't get it.
Eek2121

join:2002-10-12
Newton, NJ
Reviews:
·FreedomPop

1 recommendation

Re: Why Wireless division get all the attention

That's okay, Google has it all under control. Google buying Verizon's FiOS division wouldn't be out of the question I would imagine
--
My beta Ruby on Rails tutorial site!
openbox9
Premium
join:2004-01-26
Germany
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Re: Why Wireless division get all the attention

Dream on.
Eek2121

join:2002-10-12
Newton, NJ

1 recommendation

Re: Why Wireless division get all the attention

Oh i'm not dreaming as I don't live in a fios area.
NeoandGeo

join:2003-05-10
Harrison, TN
Agreed. Monopolies/Duopolies are making overpriced shit service thrive in the US.
openbox9
Premium
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Germany
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1 recommendation

Re: Why Wireless division get all the attention

I'm sure you realize that was sarcasm.
NeoandGeo

join:2003-05-10
Harrison, TN

Re: Why Wireless division get all the attention

Sarcasm that is right on the money. The monopolies and duopolies companies are getting away with in the US are grossly holding back overall progress.

The only time you make any sense is when your warped brain thinks it is spitting out sarcasm. That's interesting.
openbox9
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Re: Why Wireless division get all the attention

Right. So what's your feasible and executable recommendation?

hey hey hey

@charter.com
said by NeoandGeo:

Agreed. Monopolies/Duopolies are making overpriced shit service thrive in the US.

You have a choice to not have a smartphone.

IowaCowboy
Iowa native
Premium
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Springfield, MA
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1 recommendation

1 GBPS would be nice but most people don't need 1 GBPS for normal household use. Most computer programs get by fine at the speeds we currently have.

As for rural areas, they're costlier to deploy broadband to due to distance.
decifal

join:2007-03-10
Bon Aqua, TN
kudos:1
said by openbox9:

Agreed, but that's not what people around here want to hear.

Everyone should have FTTH with 1 Gbps for $49/mth. The carriers are dragging their feet and turning the US into a third world country

Well of course they want to hear it. With wireless people are capped and raped for overages. Services like netflix, steam, amazon and many other startups will be hampered by peoples limited scope.. Also, wirless is reaching areas previously left unupgraded by the cable/telecos being they was labeled (generically imo) as unprofitable/rural...

They are more than welcome to focus on wireless, but with that said, i want their grip on the landlines removed and sold to others that wish to maintain and even upgrade them.. It would be better for the consumer and according to some folks stat sheets, the cable/telecos that don't want to really mess with em.. They are basically raking in USF funds for doing nothing.. That to me is a damn shame..
openbox9
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Re: Why Wireless division get all the attention

said by decifal:

Well of course they want to hear it.

People around here want to hear that the carriers should be investing in wireless vice wireline for the healthy profit margins?
said by decifal:

i want their grip on the landlines removed and sold to others that wish to maintain and even upgrade them.

I'm sure the carriers would love to sell off some of those markets

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
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Re: Why Wireless division get all the attention

said by openbox9:

People around here want to hear that the carriers should be investing in wireless vice wireline for the healthy profit margins?

I don't think it's wise to put all your eggs in one basket, in this case the wireless basket.
--
RIP my babies Buttons 1/15/94-2/9/07, Beamer 7/24/08, & Bows 12/17/94-10/11/09
openbox9
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Re: Why Wireless division get all the attention

And half of the four main wireless providers aren't putting their eggs in one basket.

IowaCowboy
Iowa native
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Springfield, MA
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You can save bandwidth by using a pay TV service like DirecTV/Dish/cable instead of streaming Netflix. Plus the cost of a pay TV subscription is cheaper than the overages. 5GB of Verizon overages is will pay the cost of a DirecTV subscription.

FarmerBob

join:2000-12-21
Littleton, CO
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said by openbox9:

Agreed, but that's not what people around here want to hear.

Everyone should have FTTH with 1 Gbps for $49/mth. The carriers are dragging their feet and turning the US into a third world country

/sarcasm for those that didn't get it.

NO. Third World Countries have far better and cheaper services. It's the "American Way of Commerce" that is pushing us to fall behind. A grass shack in China has better services than most people here do. And far cheaper. Japan just announce a 3Gbps service for around $54 a month.

/truth

FFH5
Premium
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Tavistock NJ
kudos:5

Re: Why Wireless division get all the attention

said by FarmerBob:

A grass shack in China has better services than most people here do.

LOL. Get real. China's broadband penetration rate is 11.7%.

»techcrunch.com/2013/03/21/china-···-laggin/

Last year, the number of broadband users in China reached 159 million, or a 11.7 percent penetration rate

The US coverage is 96%. And if you look at those buying broadband, it is 88%:
»www2.itif.org/2013-whole-picture···band.pdf
openbox9
Premium
join:2004-01-26
Germany
kudos:2
Wow, guess we should all move to third world countries then Which third world country are you interested in moving to?

As for Japan's extremely limited, non-2 Gbps, but marketed as such, service for ~$54/mth, good luck with that. If you can get it, and if you can use anywhere close to those theoretical speeds, then great.
FloridaBoy

join:2009-06-22
Bradenton, FL
I agree with you to a certain extent. However, if you look at the little investing they have done with Fios, it is bringing in 2.6 billion per quarter.

I do have to wonder about their net adds though. It would be curious to know how many people leave Fios per quarter because of the price increases the past year.

dennismurphy
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Re: Why Wireless division get all the attention

said by FloridaBoy:

I agree with you to a certain extent. However, if you look at the little investing they have done with Fios, it is bringing in 2.6 billion per quarter.

I do have to wonder about their net adds though. It would be curious to know how many people leave Fios per quarter because of the price increases the past year.

188K Internet net adds, 169K Video net adds. It's growing, and growing healthily.
FloridaBoy

join:2009-06-22
Bradenton, FL

Re: Why Wireless division get all the attention

Dennis, I didnt mean to imply it wasnt healthy. Just curious about the churn caused by the price increases last year is all because net adds was less than they got 12 months ago.

dennismurphy
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Re: Why Wireless division get all the attention

said by FloridaBoy:

Dennis, I didnt mean to imply it wasnt healthy. Just curious about the churn caused by the price increases last year is all because net adds was less than they got 12 months ago.

I'd attribute that to penetration rate. The price increases actually drove a higher ARPU, and the move to Quantum has been healthy. Over 30% of the installed base are now on Quantum plans. (That was mentioned during the earnings call.)
silbaco
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join:2009-08-03
USA
But it's not very profitable.

aaronwt
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Woodbridge, VA

1 recommendation

Re: Why Wireless division get all the attention

said by silbaco:

But it's not very profitable.

But it is very profitable. Just not the extremely high profit that wireless brings in.

dennismurphy
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said by silbaco:

But it's not very profitable.

Really? 15.1% Y-O-Y revenue growth, and 21.4% margin. That's healthy... Not wireless margin healthy, but healthy.

Definitely profitable.
silbaco
Premium
join:2009-08-03
USA

1 recommendation

Re: Why Wireless division get all the attention

Yes, but what is the break down of residential vs. business/enterprise? I don't think they mention it, but I am willing to bet their residential service isn't very profitable at all and much of their profit came from business/enterprise customers.

dennismurphy
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Re: Why Wireless division get all the attention

said by silbaco:

Yes, but what is the break down of residential vs. business/enterprise? I don't think they mention it, but I am willing to bet their residential service isn't very profitable at all and much of their profit came from business/enterprise customers.

Not the case at all. These numbers are of the consumer (residential) segment. Enterprise is reported separately.
silbaco
Premium
join:2009-08-03
USA

Re: Why Wireless division get all the attention

They have a $13 million operating income on $9.83 billion operating revenue. That doesn't ring as highly profitable to me.

dennismurphy
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Re: Why Wireless division get all the attention

said by silbaco:

They have a $13 million operating income on $9.83 billion operating revenue. That doesn't ring as highly profitable to me.

Which segment is down? Right, enterprise.
Which segment is up? Right again, consumer retail.

Completely the opposite of your ASSumption.
silbaco
Premium
join:2009-08-03
USA

Re: Why Wireless division get all the attention

I don't see any indication in their report that tells me consumer retail for wired is more profitable than enterprise.

hey hey hey

@charter.com
said by silbaco:

Yes, but what is the break down of residential vs. business/enterprise? I don't think they mention it, but I am willing to bet their residential service isn't very profitable at all and much of their profit came from business/enterprise customers.

If you would actually read the quarterly report it is broken down.
FloridaBoy

join:2009-06-22
Bradenton, FL
Hmm, how do you know that silbaco?? All wireline money gets dumped in together and I havent seen Fios stuff broken out on its own.

If you have seen it broken out, care to share a link? I would love to see it.

dennismurphy
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Re: Why Wireless division get all the attention

said by FloridaBoy:

Hmm, how do you know that silbaco?? All wireline money gets dumped in together and I havent seen Fios stuff broken out on its own.

If you have seen it broken out, care to share a link? I would love to see it.

Wireline financial Highlights
> Consumer revenues were $3.6 billion, an increase of 4.3 percent compared with first-quarter 2012. Consumer arPu for wireline services increased to $107.15 in first-quarter 2013, up 9.5 percent compared with first-quarter 2012.
> Fios revenues grew 15.1 percent, to $2.6 billion in first-quarter 2013 compared with $2.3 billion in first-quarter 2012. arPu for Fios customers continued to be more than $150 in first-quarter 2013.
From: »www22.verizon.com/investor/app_r···etin.pdf

Also see page 13 for breakdown, consumer vs. small business vs. enterprise for wireline.
FloridaBoy

join:2009-06-22
Bradenton, FL

Re: Why Wireless division get all the attention

In the words of your avatar Dennis, "Doh!!".

delusion ftl

@comcast.net
Not only that, but do you think that Verizon sees any incentive to drop contracts and phone subsidies with results like this?

50K signatures on a petition is a drop in the bucket to their subscriber base, let alone the Q1 new contract signers.

The only way verizon dumps contracts is if they start losing customers. Are their subscribers ready to leave them?

antdude
A Ninja Ant
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join:2001-03-25
United State
kudos:4
Verizon could be richer if it was still expanding its FIOS service like in my neighborhoods in my cities (FIOS do exist in other neighborhoods)! Argh.

hey hey hey

@charter.com

Where is the exoflood of customers?

That's all I've heard ever since Verizon started offering Share Everything plans and ended subsidizes phones for those on unlimited data. That customers would leave en masse. Even if you want to use the "They can't leave because they are under contract" excuse. Well in the last 3 quarters, nearly 40% of Verizon customers would have fallen out of contract and thus could leave anytime without penalty. Only 3% did. Hmmmm.

And despite the supposed hatred of Share Plans 30% of Verizon customers are now on them. And while new customers have to be on them those customers are less than 1/5 of that 30%. Why in just 9 months have 25% of customers who have a choice to be or not to be on a Share Plan choose to be on one?

••••

buzz_4_20

join:2003-09-20
Limestone, ME
Reviews:
·ObiVoice
·Pioneer Wireless

Payoffs

While Wireless does have a faster return.
FIOS would be a better long term investment.

Plus you could do a package deal and have the phones offload onto the home connections to save that oh so precious wireless spectrum.

Just think of how long they can milk the speeds that are currently available.

Wireless has speed upgrades/technology changes far more often.

It's a shame how technology is chosen by profit not about what's better.
elefante72

join:2010-12-03
East Amherst, NY

Re: Payoffs

Incorrect. Wireless is king, there is no way around it.

FIOS has worse ROC and ROI, plain and simple. Also while the PPE of fibre has lower long term costs, upgrading PONs is very expensive especially for folks who want faster speeds, and those with BPONS.

Verizon also has long term liabilities on pensions that wireless does not have.

No matter how you slice it, Verizon is taking it in the shorts on wireline. The only reason that wireline still exists is for business customers which is fatty margin as they are mostly internet and voice where margins are sky high and they need fibre to do it (for now).

Copper is murdering them. It doesn't break out costs, but Capex went from 1.7 to 1.4 billion my guess is due to the reduction in FIOS net new POPs. I'm sure more than 2/3 that cost is copper spend/conversion that essentially is going down the drain. Note that is even with Sandy in there (to some extent), so this is good news.

Verizon FIOS remains concentrated in areas in the NE (mainly) where there is enormous business revenue to be had, and that is their main goal. I've seen some of their newer biz deployments in the last few months, where the PON is two pieces, primarily for the extra batteries to keep it up in extended outages.

You cannot pursue a wireless life and a wireline one and be happy. Wireline is like the uncle who comes over for holidays and hits you up for a few hundred in gambling losses forever. It never ends.

The huge difference is in wireless you push the POP cost (the phone) to the consumer where wireline is heavy on the infrastructure AND POP cost. Verizon didn't send me a bill for $1000 for my GPON and the day it took the tech to get it running.

With all that said, I am ecstatic that I have FIOS and I am glad that VZ made the investment, because the alternative is TWC and lets just say it's not even close.

buzz_4_20

join:2003-09-20
Limestone, ME
Reviews:
·ObiVoice
·Pioneer Wireless

Re: Payoffs

If the wireline business is so poor. Why don't they sell it all off?

Wireless is only king for the investors.

When it comes to broadband, Wires/Fiber is where the king lives.

If wireless is so good, why is fiber run to the cell towers?

IowaCowboy
Iowa native
Premium
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Springfield, MA
kudos:1

Verizon is kind of expensive

Verizon is kind of expensive but the service is really good. I am thinking of buying that new Netgear router with the LTE radio in it to use when Comcast goes out.

I like the 4G LTE service, its very fast.
tdumaine
Premium
join:2004-03-14
Seattle, WA

LOL

677,000 new people to realize how over expensive and undervalued verizon is and to get screwed over once they realize it.

CLASSIC!

ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

question

Im no accountant, but Im trying to understand their financial tables. After operating expenses, their Wireless had 6,418,000,000 of operating income. Why does this website say only 1.95 billion? If correct, where did like 4 billion go to, if not categorized as operating expenses?

ITALIAN926

join:2003-08-16
kudos:2

Re: question

Ok I think I found my answer, they were taxed, and then can someone tell me what
quote:
Net income attributable to noncontrolling interest
entails ?
openbox9
Premium
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Germany
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Re: question

VOD